As American as apple pie, Kentucky bourbon was booming after the last Great Recession ended. But as the economy has waned post-Pandemic – and with multiple trade wars on the horizon – the market may be drying up.

Even though the whiskey,which is traditionally made with corn and aged in charred oak barrels,has roots going all the way back to the 18th century,it wasn’t until 1964 that it became an iconic piece of Americana,when Congress passed a law declaring it a “distinctive product of the United States”.

But now, after years of double-digit growth, sales are slowing.Major brands like Bulleit Bourbon, MakerS Mark and Jim Beam are all reporting declines.

Diageo,the British drinks giant that owns Bulleit,reported a more than 7% sales drop for the brand this fiscal year. Beam Suntory, which makes Jim Beam, saw sales fall by 11% in the first half of 2023. And Maker’s Mark, owned by Beam Suntory, also experienced a decline.

Experts say a number of factors are at play. The post-pandemic economic slowdown has hit discretionary spending, meaning people have less money to spend on luxury items like premium bourbon.

“Consumers are definitely becoming more price sensitive,” says Frank Burns, an analyst at Morningstar. “They’re trading down to cheaper brands, or cutting back on their consumption altogether.”

Trade wars are also a concern. Tariffs imposed by the EU and UK on American whiskey in retaliation for tariffs on steel and aluminium have made it more expensive to export bourbon to those markets.

“The tariffs have definitely had an impact,” says Chris Swonger, president and CEO of the Distilled spirits Council of the United States. “We’re losing market share in key export markets.”

But it’s not all doom and gloom for the bourbon industry. While sales of established brands are slowing,smaller,craft distilleries are still thriving.

“Consumers are looking for somthing different, something more authentic,” says Maria Garcia, owner of a small distillery in Louisville, Kentucky. “They’re willing to pay a premium for a unique product.”

And despite the recent slowdown, bourbon is still a popular spirit. According to the Distilled Spirits Council of the United States, sales are still up 60% over the past decade.

But the days of double-digit growth might potentially be over, at least for now. As the economy continues to slow and trade wars loom, the bourbon industry may have to adjust to a new reality.

US and Canada Trade Dispute Escalates with Tariffs and Booze Bans

A trade dispute between the US and Canada intensifies as both countries implement tariffs and restrictions on each other’s goods. This escalating conflict impacts industries from aluminum to alcoholic beverages.

The US government recently announced tariffs on Canadian goods, aiming to protect American businesses. President Trump asserts these tariffs will stimulate made-in-America businesses.

Canada responded with retaliatory tariffs on US products. Furthermore, several Canadian provinces announced they will remove US alcoholic beverages – including popular brands like Jack Daniel’s, Woodford reserve, and Old Forester – from their shelves.

Lawson Whiting, CEO of Brown-Forman, criticized the Canadian response in March, stating, “That’s worse than a tariff, because it’s literally taking yoru sales away, completely removing our products from the shelves…that’s a very disproportionate response.”

Republican Senator Rand Paul of Kentucky warns the tariffs will harm businesses and consumers in his state. “Well, tariffs are taxes, and when you put a tax on a business, it’s always passed through as a cost. So, there will be higher prices,” he explained in May on ABC’s “This Week.”